“Creating Your Own Narrative”

I used this term in Tuesday’s blog as I discussed a buyer who simply didn’t “get it,” or wasn’t “with it,” in the context of the 2018 real estate market.

Many buyers out there don’t get it, and many of them try to create their own narrative, by hoping, waiting, wishing, dreaming, and eventually convincing themselves that the market fantasy they’ve created for themselves, is, in fact, the reality.

Today, I’ll give you a few recent examples of interactions I’ve had with people who create their own narrative, and you can tell me if their thoughts have merit, or if they too just don’t “get it,” as the saying goes…

Man shouting on book

Over the weekend, something happened that perfectly illustrates what happens when a disappointed, frustrated, and uninformed Toronto buyer meets reality.

What happened?

I got fired.

I use that term somewhat loosely, and at times, facetiously.

I always take the high road, and unlike many agents, I don’t feel the need to be “right.”  I don’t need to have the last word, and I don’t burn bridges.

A few weeks back, a young couple contacted me about potentially buying a home, and even from our initial email correspondence, I knew they were out of touch with market reality.

We met at a property that would surely have significant action, and they liked it.  They said they “wanted to move forward.”

The property was under-priced, and had a hold-back on offers.

But the more I explained this to them, the less they seemed to care.

One of the buyers was scheduled to go away on a business trip, and so they determined that submitting a “bully offer” that day would be the best course of action.

I told them what they needed to know – about the deposit cheque in hand with the offer, asked them about potential closing dates, went over terms, and then almost as an afterthought, said, “….and obviously, no conditions.”

One of the buyers replied, “What do you mean, ‘no conditions?’  We want a condition on financing, and a condition on home inspection.”

I was confused, but perhaps this was my fault.

I often take it for granted that not every buyer knows everything about the Toronto real estate market.

I explained, “Well if you’re submitting a bully offer, and you expect the seller to forego the offer night, your offer would have to be unconditional.  They would never sell their home conditionally, and give up the potential multiple offers five days from now, as scheduled.”

I’ll save you the rest of the dialogue, but I went on to explain the idea of a bully offer, in the context of today’s market, as well as how the seller would see it from their perspective.

My buyer responded, “We don’t care how the seller would see it.  We only care about how we see it.”

That, right there, is a willful ignorance.  It’s a growing trend, and it stems partially from dissatisfaction, and partially from a lack of common sense.

I said, “Even if you blew them away with a price so far over the asking-price that it exceeded their wildest expectations, they would still have to take on the risk that you don’t waive your condition(s) – plural, and I don’t see them taking that risk.  I don’t recall ever seeing a seller take on that risk.”

Amazingly, she responded, “Who said we’d be going ‘wild’ over asking?  We were actually thinking about coming in at the list price, or below.”

I didn’t waste any time here; “You want to make a bully offer, with not one, but two conditions, at or below the list price, for a property that will probably sell for 15% over asking on offer night?  I’m sorry guys, but there’s absolutely zero chance here.”

She calmly responded, “We disagree.”

And then she stood there, with a matter-of-fact look on her face, and a slight smile.  It was like she was proud, or had something to prove.

“We think we have a chance.  And a chance is all we need.”

And suddenly I was reminded of…

There’s a reason that movie has the title it does.

I left the young buyer couple that day, and gave them a choice; I told them that I was happy to represent them and work with them on their purchase, but they had to revise their expectations to adhere to something even remotely resembling market reality.

They told me that this is how they were going to be successful in the market, and I wished them the best of luck.

Fast-forward a couple of weeks, and they reached out to me again.  I was surprised to hear from them; there are 50,000 real estate agents in the city, and they could have found any number of willing agents who would serve as the “yes-men” (or yes-person) they were looking for.

This time, they were looking at an $800,000 listing, which of course, made zero sense, given their maximum pre-approval of $750,000.  And given my target for this house was over $900,000 when all was said and done, it made even less sense.

I emailed back and told her that this would probably fetch over $900,000, and asked if they’d obtained a new mortgage pre-approval since we had last spoke.

She simply said, “Everything is the same as it was.”

I didn’t understand.

I mean, I knew that the first time around, they wanted to make a conditional bully offer, at or below the list price.  But surely having seen that house sell for $100,000+ over asking, firm, via bully offer, and my encouraging them to adjust their expectations and approach, some of that would have sank in.

It didn’t, as it turns out.

The young buyer said they wanted to see the house regardless.

She said, “We don’t think that every house is going to sell over asking.  In fact, we think many houses will sell below asking.  We’re hoping this one sells significantly below asking, and we’d like to see it and plan ahead.”

This is one of the best examples I’ve seen in a while of wishful thinking.

And having gone through this exercise once already, I thought they would have learned.

As luck would have it, we never did tour the house in person.  An odd series of scheduling conflicts led to the idea that time wasn’t on our side (even though we had four days before offer night…), and the offer day came and went.

The day after offers, seeing the house sell for $927,580, I emailed the young buyers to tell them.

It wasn’t an “I told you so” moment.  As I said, I wasn’t chasing these guys, and I had already turned them away once.  I was trying to educate them, and bring them closer to reality.

Having told them in an email that they needed some “tough love” from me, and saying, “With a $750,000 budget, we can’t be looking at $800,000 listings, that are going to sell for $925,000,” they wrote back, and told me where to go.

Something to the effect of, “We have a perfect understanding of the market, but we also have faith.  Thanks for your help, but we’re going to look elsewhere.  Take care.”

And with that, I was technically “fired.”

Most agents wouldn’t be able to control their egos, and write back something like, “Happy Renting!”  But I simply wrote back and wished them luck, and told them to have a great weekend.

I feel bad for them, to be honest.

They’re creating their own narrative, and as a result, they’ve accepted their fantasy version of the Toronto market, as a reality.

As I alluded to in Tuesday’s blog, I met a lot of dreamers a couple of weeks ago when I had a North Toronto home up for sale.

It’s no coincidence that the cold-callers, who are proud to announce, “We don’t have an agent,” are always the most out of touch with the market.

On Saturday night, around 9:30pm, I got a page from our answering service to call “Bob Johnson,” and the message said, “You showed his son a house today.”

I knew exactly where this was going, of course.  Jimmy was interested in a house, and Dad had to call the agent and suss things out.

Bob was very cordial, courteous, and kind, for what it’s worth.  He was gracious, and thankful – let’s not get that wrong.

But was not in touch with the market, and I believe that part of that was his own doing.

He too was guilty of creating his own narrative, as everything that he said was a wish, hope, or dream.

“The market is terrible out there!” he said, to which I replied, that although house prices are down from the peak in April of 2017, they’re on the rise thus far in 2018.

“There’s way too much inventory!” he said, to which I replied that this was the only house for sale in the neighbourhood, and the only one in this price point in six months.

Everything out his mouth was a preemptive strike against a seller’s market for the home!

“A house like this isn’t going to sell quickly,” he said, which solicited an immediate response of, “Offers will be reviewed on Tuesday, and I would expect at least 3-4 at this point.”

“The house needs too much work, nobody will buy it.”

No word of a lie, folks – he just kept going, and going!

“Read the newspapers!  It’s a buyer’s market!”

“Nobody is going to make an offer without conditions!  The house needs to be inspected!  Buyers need approvals from their banks!”

I explained to him that in this market, a good listing agent will provide a pre-home inspection, and that any buyer at this price point has already obtained a mortgage pre-approval.  Furthermore, buyers know that sellers won’t accept conditional offers, in competition, so they don’t bother with conditions.”

“That’s just not true,” he told me.

“People aren’t buying before selling anymore!  They’re all buying with conditions!”

Every sentence out of his mouth was just yet another argument in favour of a poor market; one in which his son could purchase the house, for well under-asking, all according to his own timeline.

One of my colleagues ended up taking the father to the property, on the day offers were being reviewed, and the son showed up shortly thereafter.

They spent two hours at the home, going back into rooms they’d already seen, over and over.

They walked the lot, they inspected the yard, they scoped out the inside of the garage.

And by the time they had finished, it was 5:30pm, and there were already six offers registered on the home.

“We’re interested,” the father said.  “But we’re going to want to negotiate.”

My colleague is a lot like me, and getting right to the point, he rhetorically asked, “There are already six registered offers on the property, how the do you expect to negotiate?”

The father and son were on the same page; they didn’t even need to look at one-another.

“We don’t care how many offers there are,” the son explained.  “We’re going to do what’s best for us.”

Sure, I get that.  Do what’s best for you, absolutely.

But that doesn’t change the reality of the market, and if you mean “We won’t pay $2.7 Million, because it’s not what’s best for us,” then don’t offer $2.7 Million.  Just walk away, if you don’t see the value.  But that’s not what they were thinking.

“We would be buyers at two million flat,” the dad said.

My colleague shook his head, and said, “You guys aren’t listening.  There are going to be 6-10 offers, and the house is going to sell over the asking price.  Coming in $300,000 under the asking price is pointless.”

“We could go to $2.1 Million,” the dad said.

“Now you’re negotiating with me?” my colleague asked.

The dance went on for a few minutes, and eventually it ended.

The father and son scoffed at the idea of providing a certified cheque for the deposit, as they didn’t deem it “necessary,” and then said, “We’ll take our chances.  Let us know if it’s still available tomorrow.”

I don’t understand the father’s position, nor do I understand his motivation.

I can’t figure out if he was truly out of touch with the market, or if he felt that if you put something out into the universe, it might find its way back to you.  Perhaps by making all these absurd claims about the real estate market, and the process of buying and selling, he thought he could convince the market participants, or the aforementioned universe, to see things his way.

Last story here, folks, but this one might be the oddest.

Another couple who saw the house, loved it, and were highly interested.

But on the day of offers, they took a different approach, and emailed the following:

The house is lovely, it’s a great fit for our family, and we could see ourselves enjoying the warmth and cozy confines of the home for years to come.  But at present, we’re in no position to act.  We have yet to list our house for sale in Boston, and we’d ideally like to have it sold before we make an offer in Toronto.  We aren’t going to list the home until the end of the school year, as we don’t want the kids to have to deal with the emotional toil of the sale.  If the sellers would like to see the home go to a family that will cherish it dearly, please let them know that we will be back house-hunting again in June, and if they’re willing to wait a little while for us, we would love them to consider selling to us at that time.

I’m not being insensitive here, but I just can’t understand how somebody could put that in writing.

And this has nothing to do with them being from Boston, and not understanding the Toronto market.  They saw many houses during their stay, and they know each one has an “offer night.”  They’re not stupid.

But how in the world could somebody suggest that a seller, with nine offers on their home on the scheduled offer day, would put that aside, on the off-chance that one buyer makes an offer, four months down the road?

This isn’t another example of “creating your own narrative.”  It’s just really misguided.

Dare I say that with a very small portion of Toronto buyers, there’s almost this willful ignorance.  And as you saw in the first story above, the willful ignorance often comes with a hint of pride, and that, I just don’t understand.

Look, I get it, folks.  The Toronto market is expensive.  Prices continue to rise, and people want what they can’t afford.  Buyers are disappointed, and frustrated, to say the least.

I’ve never denied any of that, but pretending that reality doesn’t exist, is not the answer.

Creating a fantasy in your mind, and then trying to play it out in the real world, is not the answer.

Acting cavalier, and refusing to accept what’s given, is not the answer.

I’m sorry to be the bearer of bad news, and I don’t enjoy giving tough love.  But creating your own narrative, and then getting caught up in what you hear yourself say, is simply never going to help you in this market, no matter how badly you want to believe it…


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  1. Serg says:

    I think realtors are partially responsible for chaos that was created in Toronto. They artificially created this bidding war market by adopting “practice” of listing house 20% below market value and tben selling “overvalue”… What a nice idea: if house is worth a million, list it for 800K and then sell it for 1.05M because of blind bidding. By adopting this practice realtors ignited the market by creating FOMO and illusion that all houses are sold from bidding wars. “Sold overasking” lost it’s meaning in Toronto because there was no way to tell if it was sold over market value (because asking price was undervalue).

    It started few years ago (depending on neighborhood) and slowly became a norm.

    Today’s market really depends on neighborhood… In Richmond hill it’s buyers market for detach and prices down 20-30% from the peak. There is plenty of inventory so listing house undervalue also became dangerous move.

    In some core Toronto neighborhoods there is still not much inventory so agents can continue this practice of listing houses undervalue.

    Btw, I think this is perfectly ok if house is listed at market value and then receivew multiple offers. But I think government should make it illegal to deliberately list house undervalue and then creating blind bidding wars. This is what creates PANIC and SPECULATION and one day this panic bubble will burst. And realtors will be partially responsible for it.

    Back to story of this article , I see why author is angry and why he thinks those buyers are out of reality. But this reality is product of REALTORS. These buyers are trying to fight it, but it’s impossible to fight it alone, because 6 other buyers are biting to this under market pricing technique.

    1. cht says:

      If realtors benefit from the bidding war situation and they created it, then why did they just suddenly stop doing that for months last year? They got bored of it? Or just needed a break? Something doesn’t add up with your “theory”.

      1. Serg says:

        It’s still happening! Good example is THIS ARTICLE. I’m 99% sure that property mentioned in this article was deliberately listed below market value price to attract bidders. And realtors trying to create hype again . So author is basically blaming the buyer that he does not know about this common practice of listing house under value and that buyer is moron to try to negotiate on undervalued property. Suggestion to author realtor: next time you just tell such buyer in straight forward way: this house is deliberately listed below market value do get bidding. Do you want to participate in this blind game? But of course you won’t follow this suggestion, because you want opposite effect of people panicking and getting to play this madness game.

        In general, it depends on neighborhood. In York region there was plenty of examples when they tried to list house for bidding, did not get the price they want and then relished 300k higher.

    2. Sardonic Lizard says:

      > What a nice idea: if house is worth a million, list it for 800K and then sell it for 1.05M because of blind bidding.

      There is too much emotion associated with buying real estate. A lot of Canadians should not have been borrowing so much money in order to buy million dollar detached homes (WTF?). I saw young couples pay out the ass for old homes that had not been renovated or properly maintained in decades! Those who took the plunge had no concept of value, and most likely overpaid for their property. Watch them get pinched and squeezed as interest rates and bond yields go up.

      This year will be interesting to say the least.

  2. Jonnathan says:

    This article has made my evening.

    “You are entitled to your own opinion, but you are not entitled to your own facts”


  3. HowieTheDuck says:

    I know an agent that dragged around a couple for years with these kind of low ball bids. Although he told them it was very u likely to succeed they just kept fantasizing it would somehow work.

    Eventually they got fed up and paid 20% over asking in a multi bid just before b20 changes and now they are kicking themselves. But the point is if they had just upped their bids two yrs ago they would have bought a house that would have appreciated by 20%.

    I don’t blame folks for being paranoid and fearful right now. The govt has made it loud and clear they will f%ck with the markets until they get some sort of headline correction so they can claim victory. We live in scary times… just hope nad pray that the Liberals and their communist policies get thrown out this year from Ontario.

    1. Bidio says:

      You have absolutely no f***ing idea what communist policies are. Your bloviating is supremely insulting to the millions of people who have lived under actual communist regimes.

      1. Alexander says:

        We never had any communist regimes on the planet earth, so please do not fantasize there. I understand that USSR, China and even North Korea were claiming they were moving in the right direction, but it was wishful thinking on their side that was repeated by western media as well.

  4. jeff316 says:

    I think the lesson here isn’t that hail mary strategies have a low probability of success. I think the sellers inherently know this, but house prices are just outside of their reach so they feel they have no other choice.

    There is no “loss” for them if their strategy fails to land them a house. They stuck to their budget and principles.

    The lesson here is that a constant process of hail marying can actually increase the chances that they overpay for a house, due to the dizzying effect of constantly losing by a mile.

    Because after repeated desperated bid after desperate bid, they might lose their resolve and purposefully over-bid their budget just to get off the merry go round, or make a mistake and actually pay more than necessary on a less worthwhile house that’s within their budget.

    This is the lesson that they need to be taught. Not that their price expectations are out of whack.

  5. Natrx says:

    You and some realtors should write a book on these types of stories. during this cycle, that cycle, bidding wars, own narrative, etc. But also including ‘sweet’ stories. I think it would garner great interest, especially for commuters. And maybe make some good $$ off the sales.

  6. Ralph Cramdown says:

    Time to change it up!

    There are only so many unique stories to be written about bidding wars, and in a decade of their increasing prevalence, we’re down to variations on a theme.

    But bumps in the price chart can lead to more interesting stories. Like “what ever happened to 127 Bannockburn?” Listed for $2 last summer, sold for $1.8 after a month+ on the market, listed last fall for $1.89 (plus a silly buggers “let the market decide” feint) and this spring for $1.86, then sold this month as a power of sale for the full ask of $1.69 after ONE DAY on the market. Did the mortgage holder get the best price he could, as was his obligation? Or was the sale prearranged with a non arms-length party, with the MLS serving as window dressing? As Tolstoy said, all happy real estate deals are the same, but the unhappy ones are unique…

    1. C'mon! says:

      Yeah, great conspiracy theory Ralphy.

      And ‘ya know what else I heard…there’s this pizza joint downtown where they sell babies in the basement…I’m ‘tellin ‘ya…

      1. Ralph Cramdown says:

        I thought it made for a rather interesting series of events even if the POS process was entirely legitimate. Sorry to have overexcited you with lurid possibilities.

  7. Max says:

    There is a lack of transparency controlled by agents on how new listings really are. What’s stopping an agent from telling a little white lie about a listing that looks like it came out yesterday and won’t budge on price, versus telling them that it has been relisted 5 times already? There are good agents out there but how does one trust a salesman?

    1. C'mon! says:

      Get your own agent to represent you. It’s not that difficult.

      P.S. Buyers are liars.

    2. Kyle says:

      If you’re referring to the listing Agent, then he has no obligation to tell you it’s been relisted. Like C’mon! said a buyer should have their own Agent representing them, and that Agent will tell you whether it is a fresh listing or a re-listing.

      Considering it costs the buyer nothing to get an Agent to represent them, i’m not sure why so much kvetching about organized real estate originates from the buyers’ perspective. As a buyer you can hire the best Agent you can find who will give you all the transparency you crave and it will costs you nothing. Seems like a bargain to me.

      1. Max says:

        Sorry I was referring to buying agents that don’t tell you the full history of relists.

  8. Attadair says:

    Re: first couple.

    This happens a lot, you should have just submitted their bully but still explained why it wouldn’t be worthwhile, this way they go through the process formally and at the end of it 1) they appreciate you tried and that you knew what you were talking about… it’s a waste of your time but not really because they stay as clients and next time they trust you fully. By just sending them the sold comp afterward they don’t fully appreciate the process and therefore continue to be just as unrealistic

    1. jeff316 says:


      By sending them the sale price, he proved that if he felt there wasn’t a legit shot at the commission, all he was really interested in was being right.

      Not a story I’d put on my blog, but full credit to David for being willing to tell it.

    2. Alexander says:

      Agents are not interested in wasting their time on stubborn clients who are not listening to them if there is no chance of making money at the end. The question is whether those agents are spending time and effort to educate their clients ( with data ) or they are simply announcing the wisdom as final truth. David did not tell us how many hours of work and how much effort was involved there. Or may be there were some other factors that he did not mention…

  9. A says:

    Perhaps repeating others the narrative might be due to media reporting, non transparency for prices, poor agent advice, and self serving interest (people tend to over estimate likelihood of an outcome that they want to see). Personal experience is best – it also takes someone actually going through the offer process multiple (pun intended) times before one can truly gauge what is happening in the market.

    As for one of the scenarios David mentioned, I personally encountered the sellers accepting a below LP unconditional offer made before the offer date in the summer of 2016. The situation was probably unique in that the sellers were motivated to sell and it was challenging to get all of them together. So they took the pre emptive offer of $100k below LP. So it can happen and some luck is involved. The buyer is now trying to flip it with plans approved for >$1m more.

  10. Joel says:

    Are you printing out comparables for the buyers? If so and they still think they are going to get the home for 10-20% less than they are creating their own narrative.

    Too many people follow the articles in the paper and don’t see the actual numbers. I would think that a list and map of comparables should solve this, or the clients aren’t worth the time they are taking up.

    It’s not wrong for them to want to get a deal. Blindly bidding against yourself is stupid and something as a society we have been taught not to do.

  11. Appraiser says:

    The chances of a U.S.-style real estate crash that will satisfy the perma-bears in Toronto is one in a million.

    So…you’re telling me there’s a chance. Yeah!!

    1. Bidio says:


  12. Sardonic Lizard says:

    Wow, houses are still selling for over asking price? I guess B-20 and rising interest rates had no effect! YOLO!

    Canadians have no one to blame but themselves for the skyrocketing valuations we’ve seen in real estate this past decade.

  13. Parkhurst.Bessborough says:

    I loved this blog, David. Creating your own narrative — you are so right that people often refuse to accept the reality that is clearly in front of them. The Dumb and Dumber clip nails it 🙂

  14. Jackie says:

    I think that there are so many buyers that don’t get it because of the lack of transparency and information in TREB area real estate transactions. If the listing prices are fictitious and the selling prices are not publicly available, people are going to form their opinions based on what information is freely available. Once they have formed this opinion is going to take a lot of effort from an agent to convince them otherwise.

    1. Professional Shanker says:

      bingo! the upcoming court case should help narrow this gap.

    2. Marko says:

      You make a good point. No offense to David, but a lot of people just don’t trust realtors and these stories are indicative of that. David wants to close the deal, while these people fear overpaying in a blind bidding situation.

      1. Kramer says:

        It takes A LOT more than “sold prices” in your neighbourhood to do proper Comparable Sales analysis.

        Realtors have the data, models and experience to do it properly.

        1. Professional Shanker says:

          I disagree, most people could figure out the market value to within 5% by studying comparable sales.

          1. Kramer says:

            “most people” … “within 5%”… If that sounds good to you, cool.

            Generally speaking, when I’m buying or selling my most expensive asset I think I’ll still ask a realtor with a proper valuation model and trust their number and not give a good goddamn what anyone else comes up with… you know, so I don’t just let $50,000 slide on a $1 million home.

            Meanwhile… Sales data is already accessible on sites like mongohouse, and previously Toronto Homes Sold… For all you know, the idiots in the stories above did their own comparable sales analysis IMPROPERLY, came up with their ridiculously wrong valuations, and then proceed to run around town trying to buy based off those. Which would fit with the fact that the lawyer in Tuesday’s blog had no agent (to do valuations for him). So maybe they are the people who don’t make your “most people” cut referenced above.

          2. Professional Shanker says:

            You missed my point – if price data is transparent the majority of people would be able to formulate a general understanding of the price a property would sell for within say 5%, you don’t need a relator to do that for you based on an initial evaluation of a property. That initial evaluation should allow a potential buyer to see they can’t underbid by 20% or so, if they still can’t see it, then the agent should fire them, which David essentially did!

            Also, never would I recommend that you do not ask a RE agent their opinion of the price whether buying or selling and further during the negotiation process they can be quite valuable given their experience in the heat of the battle where emotions take hold and they need to tell a buyer if they want to get the deal done they need to increase their offer by XXX to get the place.

            Lastly, no one leaves $50k on the table – buyer’s will pay what they deem to be FMV.

          3. Kramer says:

            I didn’t miss your point, I just don’t agree with it. Which is fine, we can disagree.

            Condos is one thing – comparable sales data can give anyone an easy read on value.

            Houses, different story. How does an amateur with no model factor in differences in lot size, square footage, age of home, parking situation (private/shared/none/laneway), etc etc etc into price vs a list comparables.

            Yah sure you can put a vague estimate down, but you can do that today already with available data and some common sense, you don’t need access to the full history of real estate in Ontario to put down a vague estimate. Some people’s vague estimates are reasonable and some people’s are idiotic (like those in the story above). Having access to ALL the data won’t change that.

          4. jeff316 says:

            Then why are we seeing such bid variation in bids for multiple bid scenarios?

          5. Kramer says:

            I’d say that for starters you have the valuation of a house based on a thorough and fair and standard comparable sales analysis – this valuation is done by the sellers and their agent as is what they peg the house to be worth. Call this number $X, and as we know $X is not necessarily the list price.

            The buyer and their agent have also hopefully had the conversation of “what is it worth”, but to answer your direct question, what they’re willing to pay is a different conversation. These numbers are filled with individual biases. Such as:

            Bias # 1: Some buyers will only ever offer what it’s worth, some will lowball every property they see vs what it’s worth, and some are willing to overpay vs what it’s worth.

            Bias #2: Some buyers will put more or less valuation weight on certain factors and let it impact what they are willing to pay.

            Add these (and probably many more) biases together and you get a variation in bids / what people are willing to pay.

            Back to people who “don’t get it”: If what someone is willing to pay is incredibly warped from $X, and if these people vehemently believe in this number to the point where they don’t at all contemplate that $X is a fair value or that other buyers might be willing to pay more, then you get buyers who “don’t get it” or are “not living in reality”.

            And back to the original point of all this… none of this has to do with the amount of data these people have access to… whether they have 3 comparable sales or 50 comparable sales to play with at home, the data should still get to a value of $X if a proper unbiased model is used that factors everything in… the same $X their (good) agent would have told them… the degree of bias and stubbornness will take it from there and potentially make a story like those above.

            So… if we’re gonna get all the data, we better also have a standard, fair and thorough valuation model to plug it into. This is a very standard thought… look at any asset valuation situation (equities, bonds, derivatives, commercial real estate)… you have data, and you have a valuation model. If your valuation model for a million dollar asset is eyeballing the data, your analysis is incomplete.

            With all the data but without such a model, you’re still going to have to ask a professional “what is this house actually worth?”, and then decide what you are willing to pay for it.

            With all the data and with such a model, you’re still going to have to decide what you are willing to pay for it… and hopefully you are living in reality.

        2. Craijiji says:

          On the flip side there are realtors that suck at valuations too, regardless of their models.

          When we sold our loft we had two separate agents come in (one of which was the agent we used to buy the place) and they both ball parked the value at around $450k, which we thought was too low. We had one agent more come in and tell us that the other two were idiots…We sold for $590k.

          Bottom line is agents don’t know it all.

          1. Kramer says:

            True… true… I should have said that generally speaking, I never trust asset valuations to idiots.

            That’s a whole other blog post, which David should write:

            “How to make sure you’re working with a good agent, and not an idiot: 101”

      2. Professional Shanker says:

        So maybe it is that the RE industry just doesn’t “get it” when it comes to certain buyer’s opinions of the market, even if they are detached from reality. Should we expect everyone to put their blind faith in relator’s read of the market, if you trust the professional you are working then sure, easier said than done for some buyer’s.

        How can we increase the trust the stakeholders place in the industry – simple, make pricing information public.

        1. AK says:


          The issue here isn’t just that they don’t get it. It’s a lack of trust. They don’t trust their Realtor.

          Some people are willing to accept the opinions of people they just met and act on it. These people “get it” (apparently). Others are skeptical, these people “don’t get it”.

          A quick way to solve this problem would be open up the data so they could see for themselves that houses are selling for top dollar in x neighbourhood, and if they can’t or don’t want to pay top dollar, they are wasting their (and everyone else’s) time. Alternatively, since we know that will never happen, a realtor probably needs to go through the motions and let them lose a couple times before so that they can see first hand (and don’t just have to rely on the opinion of their realtor). That’s all.

          But of course the people who fire their agents because their self created narrative doesn’t play out – that’s fair, they don’t get it….

  15. Condodweller says:

    I took a look at some recent sales and in the 1 million range houses sold for 20-100k below asking in a good neighbourhood that typically holds up well even in a weak market. I have to look in high demand locations with multi-million prices to see 100-200k over asking sold prices.

    While the Boston buyers are clearly living in la-la land I think it’s perfectly reasonable to go after an 800k listed house with a 750k budget if you are looking for a deal and don’t mind losing a few times.

    Obviously, multiple offer situations are different but even then, if all the buyers hold their ground and offer near asking, all though, probably over asking, things may turn out different.

    I suspect affluent buyers in the multi-million market will trust their agents more and are more likely to bid hundreds of thousands over asking to get what they want. In the lower priced market the average family will likely have a hard budget thereby limiting the over asking amount.

  16. Kyle says:

    IMO, there are three realities that buyers need to educate themselves on and accept in order to be successful:
    1. What they can actually afford (not to be confused with how much their lender tells them they can afford)
    2. What properties actually sell for (not to be confused with how much properties are asking)
    3. How real estate negotiations actually work (not to be confused with buying and selling any other product)

    Any refusal to educate oneself or accept any of these realities is just another form of denial.

    1. Kramer says:

      I also believe that you need to know the difference between:

      Grit/determination VS. Stupidly throwing never ending Hail Mary Passes

      Grit/determination can possibly (but not necessarily) get you an edge and help get something done. I’ve seen it before.

      Running around town lowballing the shi# out of every listing will do nothing but waste yours and other people’s time and money.

      These people think they’re putting in work – grinding it out on the street – and that they’ll eventually get paid for it via stealing a property for significantly under market.


      1. Kyle says:

        I agree there is a difference between grinding it out as a strategy and hopelessly putting in low ball bids. And that difference is probability. In the former group i think of professional flipper/Agent teams, who may have to put in a lot of time and offers before finding suitable properties, but they wouldn’t waste their time doing what these clueless buyers do. Because what these buyers are doing has 0% chance of working.

  17. Libertarian says:

    From the first couple, “We have a perfect understanding of the market, but we also have faith. Thanks for your help, but we’re going to look elsewhere. Take care.”

    I know that David was paraphrasing, but if the couple is religious and are relying on faith to get them a home, well then, they’re going to be waiting a long time. As if god has anything to do with the housing market in Toronto. I don’t like being judgmental like this, and I have nothing against spirituality, but do these people seriously expect god to bring them a house?

    I find this couple to be the most delusional of the three examples.

  18. Professional Shanker says:

    Disillusioned buyers and sellers is a tell tale sign of a market in transition, up and/or down. You cannot fault these buyers as certain spots in the GTA (York Region) are a buyer’s market, just last month Detached homes in King sold at an average of 93% of their ask price, so to say a $300k price reduction on a $2.4m (ask) detached home isn’t available in the GTA in February is false. Unfortunately, they have not educated themselves on the neighborhood they are buying in, sad really and a waste of your time!

    As much as I agree with your depiction that these buyers have created their own narrative and that is 100% their fault, under pricing the house by 10% further allows these narratives to happen. If this house was priced at $2.7m, it is unlikely you would have had interest from fringe buyers hoping to grab these house on the cheap, relatively speaking of course :). That said everyone understands why houses are under priced and if the seller and agent want to go this route, then I think it is the agent’s responsibility and job to deal with the dreamer’s, after all you did advertise something at a 10% discount which won’t actually sell at that price.

    Just imagine if we implemented negotiation pricing in other goods/services (milk, gas, electricity), it would lead to the misinformation we have in the RE market currently. It is so wrong to allow Uber to have surge pricing in peak times or better yet why restrict drug prices, shouldn’t these be based on supply/demand like the RE market is?

    1. Ralph Cramdown says:


      Setting the listing price is like turning the knob on a machine labelled “Nut-o-Meter.” List near the market and get your usual collection of nosy neighbours, candidate buyers and the occasional crank, but if you list it 15% low, the circus comes to town. Bonus circus, early 2018 edition: Chasing those lucky(?) buyers with mortgage pre-approvals from before January 1st, for whom the clock is ticking loudly.

      1. Professional Shanker says:

        I am quite interested to see the impact on the market that these pre-approvals will have – will be tough to see in the TREB stats as the offers will run out just as the GTA turns into the prime spring market season

  19. Marina says:

    I do think that sometimes it takes losing an offer to really hammer in reality.

    When we first started looking for our first house, our very first offer was on a house in midtown. Multiple offers, and we put in 10K over asking (for the record, it sold about 60K over asking). This was about 8 years ago, and we really had little experience and knowledge.

    Our agent told us it wouldn’t work, but we really wanted to try and I think she knew we needed to go through it once to really understand what we were dealing with. Offer night we sat in the agent’s office with like 10 other couples, and we were of course out in the first round. But I think it made the market real for me. We never made the same mistake again.

    Now yes, we likely bumped up the price on the house, and it was a waste of time, but some buyers may need that little dose of reality to hammer home what their agent has been telling them.

    That said, I think the people in your examples are un-teachable 🙂

    1. Condodweller says:

      Yes, I believe experience is the best teacher. Loss of the first offer and a few sample sold listings showing the asking/sold price should ground most buyers.

    2. Professional Shanker says:

      Your experience was 8 years ago and a valuable one of course. Fast forward to 2018 and would you be able to come to terms with paying 10% over ask for a home in midtown in 2018 at current prices? When I say terms, I mean put yourself in a first time buyer’s shoes right now and would you have the willingness to stretch your financial situation an additional 10% to secure shelter? I ask this sincerely as the financial burden people are taking on is more significant than it was 8 years ago, perhaps a dose of reality is not understood by anyone not in their shoes?

      1. Kyle says:

        I think you’re confusing different issues. The main issue here is that these buyers need to educate themselves / or accept the reality of the market. If they had done that then they would realize that the asking price is not relevant and that they should be shopping for houses that will sell for what they can afford based on comps, rather than shopping for houses that they hope they can afford based on asking price.

        1. Professional Shanker says:

          Fair enough, I completely agree with the larger issue of buyer’s educating themselves/accepting reality. That said I do have sympathy for current buyers in this market as accepting the reality of the market has never been tougher – I merely like to play hypothetical with people who purchased 5+ years ago, would they be able to follow their own advice they acquired in a much cheaper market, I am not so sure they would be able to and that is why David has some very entertaining stories for us!

          So in response to David’s question – the answer is either to engulf oneself in large amounts of debt with the hope interest rates do not rise too fast or rent in Toronto/buy outside. The answer is quite simple but don’t expect people to succumb to this harsh reality without kicking and screaming/creating their own narrative.

  20. Laurin Jeffrey says:

    Oh lord, this is what we deal with every day.

    “How do you know the house will go over asking?”
    Years of experience, 100s of multiple offer situations… And you’ve done this, oh, never?

    Etc. etc. etc.

  21. ed says:

    The stories sound like they could be from a episode of ‘Black Mirror’

  22. Agnese says:

    I love your stories! More please!

  23. Piyush says:

    I think lot of this has to do what talking heads in the media and news reports stating a dire state of real state in Toronto leading to people taking it on face valu and expecting double digit % drops in price of the house. People don’t get that a drop in avg price can also be attributed to a drop in sales of single family homes vs condos and not necessarily a drop in actual price of single family home.

  24. Francesca says:

    It seems that some people are not willing to accept reality at all even when its staring them right in the face! David you are right these buyers are naive, clueless and just in denial. The story of the couple moving from Boston is beyond ridiculous! Who would wait that long for a potential offer that may never materialize! It is interesting though to read that bidding wars are happening again in the TO market and that things are selling over asking as many of the real estate news stories lately have been about how sales are down etc. It seems like that it is still a sellers market in many areas of the city. David can I assume that most of these people were looking in central toronto or downtown? In my parents area at Bayview and York mills it’s def a buyers market lately as everything is selling under asking and taking longer to sell compared to last year. This is due to the fact that there was a high percentage of foreign investment there hit hard by the added sales tax and most of the houses start at over 2 million so not many people can probably qualify for a mortgage. Furthermore in york region where I live the situation is even more grim as literally nothing is selling and forget having an offer night or over asking sold price. You are lucky if you can sell your house at asking price in two months! Maybe you should suggest to these clients who refuse to pay over asking to search in other areas of the GTA? I know this may be impractical based on where they work but you would be surprised at how many people would rather have a longer commute and cheaper house than vice versa.

    1. Piyush says:

      I agree GTA seems to be a buyers market right now. Lot of homes in our area have been listed for more than a month and have seen price drops from their listed prices. All though still listed for million plus but same time are ne constructions.

      1. Geoff says:

        What intersection?